The Contra Proferentem Rule II

I pick up a phrase, I write a post – voila! we have more on it from the SC, 11 days later. That is the power. The Judges give to you what you need.

In Halsbury’s Laws of England (5th Edition – Volume 60, Para 105 ) principle of Contra Proferentem rule is stated thus: where there is ambiguity in the policy the Court will apply the Contra Proferentem rule. Where a policy is produced by the insurers, it is their business to see that precision and clarity are attained and, if they fail to do so, the ambiguity will be resolved by adopting the construction favourable to the insured. Similarly, as regards language which emanates from the insured, such as the language used in answer to questions in the proposal or in a slip, a construction favourable to the insurers will prevail if the insured has created any ambiguity. This rule, however, only becomes operative where the words are truly ambiguous; it is a rule for resolving ambiguity and it cannot be invoked with a view to creating a doubt. Therefore, where the words used are free from ambiguity in the sense that, fairly and reasonably construed, they admit of only one meaning, the rule has no application.”

“The aforesaid rule, in our considered opinion, has no application to the facts of this case.”

Hon’ble Justice Abhay Manohar Sapre, United India Insurance Company Ltd. v. M/s. Orient Treasures Pvt. Ltd., [Civil Appeal No.2140 of 2007].

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